Morocco’s Bank Lending Rates Drop to 4.30%, Lowest in Years

During this year, the lending rates should fall by 0.42 percentage point, i.e. 56% of the double drop in the key rate of 0.75 percentage point in March and June, according to L’économiste. Thus, there is still room to further reduce lending rates for borrowers, according to some analysts.

Oxygen and Relaunch credits occupy a large share of production. But the interest rate on these products has settled at 3.5%. In addition, the drop in rates applied to SMEs has been considerable, compared to the drop in the key rate. It reached 1.43 percentage points between the third quarters of 2020 and 2019.

In nine months, the average cost of money in this regard has fallen by 0.75 percentage point compared to the same period in 2019, thus exceeding the 5% level by reaching 4.44% in the 3rd quarter. In contrast, large companies find themselves at 3.88% thanks to a discount of 0.62 percentage point compared to the 3rd quarter of 2019.

However, the drop in financing costs is not yet conclusive for investment, mainly due to the health crisis. For a large part, the demands of non-financial private companies are first affected by current expenses, hence the 9.4% increase in the outstanding amount of working capital loans during this year. During the same period, the outstanding amount of investment loans fell by 0.6%.

At the household level, activity has declined considerably. Thus, the outstanding amount of consumer credit has also fallen by 0.62 percentage point in the 3rd quarter, compared to April-June and by 0.54 percentage point compared to the previous year.